Question

Using a perpetual inventory system, the seller’s journal entry to record the sale of merchandise on account includes a:_________.
A. Credit to Cost of Goods Sold
B. Debit to Inventory
C. Credit to Purchases
D. Debit to Accounts Receivable

Answer 1

Answer:

D. Debit to Accounts Receivable

Explanation:

Transaction of sale in Perpetual Inventory system will be recorded as follow:

                                          Dr.    Cr.

Account Receivable         xxx

Sales                                          xxx

Cost of Goods Sold          xxx

Merchandise Inventory            xxx

There is no entry to purchases, cost of goods sold is debited and inventory is credited. So, the only correct option which is dealt in above transactions.